Author: Marcelo de Paiva Abreu

Source: The State of S. Paulo - 16/11/2009

At some point, still in the first half of the second term of the Lula government, it did not seem unreasonable to think that Brazil could finally take the leap that would allow it to overcome its structural problems in a sustained manner. It would be possible to finally abandon the “splendid cradle”, to stop being the country of the future. The robustness of prudent macroeconomic policies, combined with the opportunities created by the exploitation of the natural resource base, amplified by new discoveries, would be an essential element that would allow such a leap. Gross fixed capital formation would be gradually increased and “chicken flights” would be reminiscent of the past. Growing rapidly would enable the continuous reduction of social inequalities, the improvement of educational levels, the expeditious functioning of the Judiciary, the reduction of crime, the solution of the housing problem, the consolidation of the regulatory State.

This qualitative leap would require a succession of good governments. What does the analysis of the current political framework indicate regarding the likelihood that the 2010 presidential election will result in good government in the 2011-2014 quadrennium?

President Lula, deprived of José Dirceu and Antônio Palocci, strong candidates who could have party consistency, and lulled by their approval ratings, ejected the party and opted for solo flight on the populist route. He gave his arm to Getúlio Vargas and Juscelino Kubitschek and sent party consolidation to the fava beans. He personally chose the successor and is using the public machine wide open to try to make a name of reduced political expression possible. In the midst of this process of plunging into populism, a “stick to the machine” atmosphere was created, of generalized increase in public spending, in the name of half-bowl Keynesianism and, in many cases, with the explicit purpose of cooptation. Expanding the public machinery is making it possible to increase the relative weight of the permanent state bureaucracy that has close ties with the governing coalition. That will persist for many years.

The government's decisions on the pre-salt layer, on the other hand, reveal notable setbacks in relation to the nature of the relations between the business state, the private sector and taxpayers and also the degree of exposure to competition to which suppliers of established goods and services should be exposed. in Brazil. Pre-candidate Dilma Rousseff, in particular, with the usual vehemence, defended statism and “nationalism” based on the old “who does not think like I am a surrender”. Co-optation efforts extended to the business sphere, perhaps emblematically illustrated by the shipbuilding industry, which saw resurrected policies that would make shipbuilding entrepreneurs jealous at the height of the military regime. No lesson seems to have been learned from the disastrous failure of the past.

The roots of this relapse towards state capitalism have been linked to Peronism and Getulism. In both cases, however, the comparisons seem anachronistic. Peronist policies for the benefit of the shirtless, in the post-war period, had their rationale, since Argentina was unable to find customers who would pay their exports in cash. Better that meat be eaten at home. Despite folklore, Getúlio was coy about statism, as the history of Companhia Siderúrgica Nacional (CSN) and Vale show. Far from being examples of preference for the entrepreneurial state, it was the lack of interest in private capital that forced the interest of the state. Even in the case of Petrobrás, the Palácio do Catete was more restrained in terms of state monopoly than Law 2.004, of 1953. Entrepreneurial state, yes, but supplementary to private sector initiatives.

In the area of ​​“agitation and propaganda”, this inflection of the Lula government has a scent of cult of personality that constitutes a disservice to the biography of the honoree. From the movie celebrating the life of the victorious metalworker to the trick questions included by some doormat from the Ministry of Education (MEC) in the recent Enade exam. The flattery environment is evident. Lula does not need this to register his evident importance among the biggest names in Brazilian political life, even if one takes into account the recent deterioration.

Are there any optimists about the performance of a Rousseff government from 2011? Who will be your political strategist? Who will make the small policy of Planalto? It is hard to believe that Lula remains in his position as Dilma's mentor. He lacks the willingness to operate far from the limelight. You will save yourself, in the name of your candidacy in 2014. Wouldn't it be inevitable to strengthen the more physiological segments of the governmental coalition? On the other hand, the possibility of Lula launching a Plan B with chances of victory, in the event of some major hitch in the Dilma Rousseff candidacy, seems compromised by the electoral calendar.

There are those who think that the situation could be rescued by an opposition victory. But it is difficult to be optimistic based on what the opposition has been doing or saying in recent months. The tactic of silencing to avoid direct confrontation with the extremely popular Lula is questionable. It is ridiculous when the likely opposition candidate, when he ventures to take a position, is as bitter a critic of the “interest and exchange rate” policy as the most insane Shiite in the government coalition.

To an unsuspecting observer, it would seem that the government and the opposition are in perfect harmony to make the “Brazil in a splendid cradle” project viable in a non-party effort.

* Marcelo de Paiva Abreu,

Ph.D. in Economics from the University of Cambridge, is professor at the Department of Economics at PUC-Rio